‘Self-help’ strategy helps Viridor counter China’s trade restrictions

The impact of meeting higher quality requirements because of China’s policies was higher costs of £ 3 million, according to the full-year results of Viridor’s parent company Pennon. On the plus side, Viridor’s waste-to-energy facilities are ‘performing well’ despite China’s tighter import regime.

‘At Viridor, the operating fleet of energy recovery facilities is performing well, transforming household waste into electricity and heat,’ states Pennon Chief executive Chris Loughlin. He notes that Viridor continues to deliver a ‘strong performance’ across both waste and water operations.

And he adds: ‘Good progress is being made to bring Viridor’s remaining four energy recovery facilities in the portfolio on stream, with three in commissioning and the final facility under construction.’ The report further stated that Viridor was actively countering the challenging market situation with ‘self-help measures focusing on asset and contract optimisation, innovation and accessing new markets’.

Excellent prospects for glass

Recently, Viridor and Kier Environmental Services have joined forces in a 12-month contract which will see Cheshire West and Chester councils’ 10 000 tonnes per annum kerbside collected glass sent to Sheffield as part of a closed loop recycling waste management solution.

The material received at Viridor’s £12 million Sheffield Glass Recycling Facility is ‘excellent quality’ and a testament to the efforts of the residents of Cheshire West and Chester and Kier’s professional collection strategy, comments Viridor Resource Management Managing Director Keith Trower.

Over budget

Viridor faced two major setbacks with local authorities in the past two years. In 2017, the Greater Manchester Waste Disposal Authority terminated a joint venture on grounds of cost and while problems with contractors for its Glasgow facility, currently under construction, has forced Viridor to claim compensation from the principal contractor.

Interserve was removed from the Glasgow project in 2016 because of delays and, in March, Viridor warned the project was £95 million over budget. ‘Viridor is contractually entitled to recover incremental costs from the original principal contractor, Interserve, under certain circumstances, £69 million receivable recognised at year end,’ it is pointed out.

‘Fit for the future’?

Commenting on the waste market generally, Loughlin says: ‘The UK recycling system needs fixing. We are encouraged that the “Blue Planet” effect is spurring action and we are optimistic that positive changes will be announced in the Resources & Waste Strategy later this year creating a UK recycling system fit for the future.’

Fellow waste manager Renewi has reported losses in its municipal waste division while the wider group, formed by the merger of Shanks and Van Gansewinkel Groep in 2017, secured earnings up by 30% to £69.1 million. Its annual showed overall revenue up 8% to £1.5 billion and underlying profit before tax of £51.5 million.